Technology and the insurance sector go hand-in-hand. According to a recent survey by Accenture, insurance executives say that their organization’s business and technology strategies are becoming inseparable, some have even said indistinguishable. The insurance sector continues to expand, with the Property and Casualty insurance industry changing with it. This change is driven by digital insurance offerings and a defined omnichannel approach to customer service. Because of this, it has become extremely beneficial for insurance professionals to obtain a Property and Casualty license.
The following trends have been incorporated by some insurance carriers and will continue to dominate the insurance sector into 2022.
1. Artificial Intelligence (AI)
AI is ever changing as it is still in its developing stages, and is projected to grow into a $190 billion industry by 2025. A PwC forecast has found that AIs initial impact on the insurance sector will be to improve efficiencies and to automate customer-facing underwriting and claims processes. Once this has been done, AI is projected to identify, assess, and underwrite emerging risks and identify new revenue sources. Insurers are able to create a personalized experience by accessing and using the available consumer data based on a consumer’s behavior and habits. Additionally, insurers can use AI to speed up claims processes.
2. Predictive Analytics
This trend has been used by insurance providers in order to obtain a range of data to understand and predict consumer behavior. Predictive analytics can also be used for:
- Pricing and risk selection
- Identifying customers at risk of cancellation
- Identifying risk of fraud
- Triaging claims
- Identifying outlier claims
- Anticipating trends
3. Internet of Things (IoT)
Seeing that many consumers are willing to share extra personal information to save money on their insurance policies, IoT is able to automate a large amount of that data sharing. Insurers would then be able to use the data from IoT devices to determine better rates, mitigate risk, and possibly prevent losses. Examples of these are the various components of smart homes, automobile sensors, and wearable technologies.
4. Machine Learning
The insurance technology trends aim to improve accuracy, and machine learning is one of these trends. Machine learning, being a branch of AI which is more specific, is a form of technology which serves to process data and learn on its own without needing the assistance and supervision of humans. Machine learning will use pre-programmed algorithms to analyze files which are accessible via the cloud. The end result will be to automate and improve on claims processing.
5. Blockchain Data
Blockchain data is a distributed, peer-to-peer ledger of records, referred to as blocks, which are incorruptible. The blocks form a chain by linking to a previous block, and all blocks have a time and date stamp. Blockchain data is self-managed and does not need coordination or human intervention.
Blockchain data has been projected to have an impact on the insurance industry’s consumer trust, by enhancing efficiencies and improving claims processing. Additionally, blockchain data will be able to prevent and detect fraud which will be an extremely useful advantage.
Insurtech, also known as insurtech companies, use the latest insurance technologies in order to reduce costs for customers and insurers. The technology is also made use of to improve operational efficiency and the customer experience.
7. Social Media Data
P&C insurers can use social media data to improve risk assessment, bolster fraud detection capabilities, and enable new customer experiences. Social media can also be used to investigate fraud. The social activity of the insured consumer may be compared to claims records to find any discrepancies. For example, a Morgan Stanley report mentioned a tool that monitors the insured consumers’ activity on the day of the loss to look for any possible red flags.
Telematics function to monitor the insured consumers to formulate their policy premium. Auto policies are largely affected by this, where cars can be fitted with fitted devices to measure indicators such as speed, location and accidents. Additionally, telematic offers benefits, for insurers and insured consumers, such as:
- The encouragement of better driving habits.
- Lower claims costs for insurers.
- Being able to change carrier to customer relationships from being reactive to proactive.
Chatbots have improved customer experience, seeing that over 60% of end-users consider chatbots to be their main choice for customer service inquiries. Insurance providers have used chatbots to improve customer service, provide faster and better responses, and to gather more data to create a more enjoyable customer experience. If insurers develop and successfully integrate chatbots into their business system, they would be able to assist consumers during a policy application or claims process, which would only require human intervention for more complex cases.
10. Low Code
Low-code configuration tools assist insurers to update and manage apps and software using an intuitive, user-friendly drag and drop functionality. This does not require the assistance of an IT professional. By using low-code development, insurers will receive benefits such as:
- increased speed to market
- widespread app development across the organization
- the ability to build foundational features that can be expanded
- empowering employees to take control of their work/offerings
To compete with competitors, insurers in the P&C industry will have to be prepared to incorporate the new developments and trends in technology. This would benefit the insurance sector and provide an excellent customer experience and customer satisfaction. By doing so, insurers will save time and money, while ensuring a loyal customer base.